Transportation

Approximately $48 billion

Transportation--especially highways, transit and high-speed rail--accounts for one of the largest pots of money in the Recovery Act.

Highways

The largest portion is for highway projects. The Act provides $27.5 billion for road restoration, repair and construction through the Federal Highway Administration. This amount is apportioned among the states by formula, but the states are required to give priority to projects that can be completed in three years. If a state does not meet certain timelines in spending the funds it risks losing portions of the money.

Transit

$6.8 billion to the Federal Transit Administration to apportion to the states by formula for public transit capital assistance. There is an additional $100 million for discretionary grants to public transit agencies for projects that reduce energy consumption or greenhouse gas emissions. There are also deadlines for the use of the transit money.

Rail

$8 billion for discretionary grants to states for capital assistance on high-speed rail corridors and intercity passenger rail service. Another $1.3 billion is provided in grants to Amtrak for use in repair, rehabilitation and upgrade of its rail assets.

Airports

$1.1 billion for the Transportation Department to use in making discretionary grants to airports for infrastructure improvements.

Other Grants

$1.5 billion in discretionary National Surface Transportation System grants that will be awarded by the Department of Transportation on a competitive basis to state and local governments or transit agencies for roads, bridge, transit and other transportation projects. The Department is supposed to seek an equitable distribution between urban and rural areas. Another $1.5 billion is available for infrastructure investments for fixed guideway systems (any transit service that uses exclusive or controlled rights of way). Half of this is in formula grants to state and local governments, and the other half is for discretionary grants.

Policy Issues

What is ARRA transportation money spent on?

Smart Growth America (SGA) and the Transportation Equity Network are organizing around the types of projects selected by state departments of transportation for ARRA-funding. SGA has announced that projects considered for ARRA funding should be not only shovel-ready, but shovel-worthy. These organizations are advocating that the funds be spent on transit systems and alternative transportation systems such as bicycle/pedestrian lanes and trails that will provide transportation service in a more equitable and sustainable approach than is normally employed by state DOTs.

SGA is also advocating for a fix-it-first approach to spending stimulus funds, rather than building new networks of roads that will intensify sprawl from metropolitan areas. This approach seems successful as measured by ARRA spending so far. The first phase of ARRA transportation funds must be spent within 120 days of receipt by state departments of transportation. Most of this money has been allocated to highway projects, and much of it to repair and maintenance of existing highways.

Where is ARRA transportation money being spent?

There are two geographic dimensions that are generating competition over ARRA transportation funding. The first type of competition is occurring between the types of regions that are receiving funding. Urban areas are competing directly with rural and suburban regions of states for federal funding of their transportation projects. Many mayors of large cities have decried the allocation process, arguing that they are being shortchanged. This is due in part to state DOTs' conventional roles as builders of state highways. State DOTs are less inclined (and less equipped) to fund transit and alternative transportation projects used more commonly in urban areas. Moreover many states expect that urban metropolitan areas will receive funding through separate streams of the ARRA that will bypass state government, and only 30 percent of ARRA funds provided to DOTs for surface transportation must be sub-allocated to local governments.

The second geographic conflict stemming from ARRA transportation funding is allocation to areas that have expressed need for funding versus those that serve a political purpose. There exist three kinds of "need" for ARRA transportation funding: areas with high unemployment, areas with a larger proportion of deteriorated transportation infrastructure, and areas un- or underserved by transit. The ARRA makes no distinction about the types or locations of projects on which transportation funds may be spent, except that project selection priority is given to projects that can be completed within three years and are located in economically distressed areas. All of of these types of "needy" areas are competing with high visibility projects in politically expedient areas.

A final policy debate occurring around ARRA transportation infrastructure funds describes who receives the work generated by the construction. First, smaller contractors are less likely than large contractors to win contracts on projects to construct large new roads because they cannot respond with bids as quickly. Second, even if the transportation project is located in an economically distressed area, workers may be from other parts of the state, reducing the economic impact in needier areas. Third, there is a question around the diversity of workers who obtain ARRA-funded transportation jobs. The National Employment Law Project and the Partnership for Working Families have joined with over 40 other groups to request that the Obama Administration issue an executive order that encourages the hiring and training of minorities, women and low-income residents to work on federal construction projects funded by the economic stimulus package.

RESOURCES

U.S. Government Accountability Office, Recovery Act: States' Use of Highway and Transit Funds and Efforts to Meet the Act's Requirements, testimony before the House Transportation and Infrastructure Committee, GAO-10-312T, December, 2009; online here.